AT&T Sues Ad Watchdog Over T-Mobile Ad Dispute
AT&T filed a lawsuit Thursday in Texas against industry ad watchdog the National Advertising Division (NAD) over its attempt to block the company from running ads about T-Mobile’s repeated violations of NAD rules on deceptive ads. “It is one thing for NAD to prove ineffective at stopping deceptive advertising,” said AT&T in a complaint at the U.S. District Court for Northern Texas. “It is quite another for NAD to demand, privately and publicly, that AT&T censor its own truthful statements about T-Mobile’s deceptive advertising history -- that NAD itself disseminated to the public.”
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T-Mobile and the NAD didn’t comment.
AT&T issued a press release Oct. 23 kicking off a TV ad campaign in which actor Luke Wilson calls T-Mobile “the master of breaking promises" and holds a newspaper with a headline describing T-Mobile as “the most challenged for deceptive ads.” AT&T’s release said NAD has challenged T-Mobile ads 16 times for violating deceptive advertising rules, “more than each of the entire consumer electronics and financial services industries.”
The next day, NAD sent AT&T a cease and desist letter and issued a press release, accusing the company of violating agreements that restrict participants in the NAD’s industry self-regulation efforts from making deceptive statements about NAD rulings or using those rulings for promotion or advertising. “The integrity and success of the self-regulatory forum hinges on the voluntary agreement of participants in an NAD proceeding to abide by the rules set forth in the BBB National Programs’ Procedures,” the release said. “As a voluntary process, fair dealing on the part of the parties is essential and requires adherence to both the letter and the spirit of the process.”
In Thursday’s complaint, AT&T said NAD’s release caused several networks to pull its ads, though an AT&T spokesperson declined to specify which networks. The spokesperson confirmed Thursday that the ad is still being broadcast. The carrier's complaint said NAD’s cease-and-desist letter was a threat of imminent litigation and asked the court to issue a declaratory ruling that AT&T didn’t violate NAD procedures. “The notion that a court would prohibit a company from making true, non-misleading, and non-confidential statements to the public -- on a matter of great concern to tens of millions of consumers -- is anathema to the values embodied in the First Amendment.”
AT&T argued that its ads don’t violate NAD procedures because they don’t reference specific written documents authored by NAD and don’t refer to NAD decisions, merely “challenges.” NAD itself issues press releases about its decisions against T-Mobile, AT&T noted. The group's interpretation of its rules -- “that any participation in an NAD proceeding at any point in the past imposes a perpetual gag order regarding mere reference to any public NAD decision in promotional materials -- is too broad to be right.”
In addition, NAD’s adjudication process is broken, AT&T said in the complaint. “It was NAD’s repeated failure to take action against T-Mobile’s disregard of these same procedures that created the need for AT&T to set the record straight,” it said. “AT&T has repeatedly raised concerns with NAD about the erosion of NAD’s effectiveness and T-Mobile’s continual defiance of NAD’s decisions. ... As NAD has faltered, AT&T has grown increasingly concerned that false and misleading advertising is distorting the marketplace, eroding consumer trust, and harming lawful competitors.”